Wednesday, 4 February 2009

How Kazakh people became poorer in one day

Yesterday the National Bank of Kazakhstan devaluated the tenge by 25% from 120 to 150 tenge to the dollar. Officially. On the black market there were crazy rates up to 180 tenge to one dollar. One might think that it was a predictable trend and that Kazakhstan would sooner or later follow the devaluation of the Russian ruble. Yes, the story is very similar to Russia but way too extreme. In Russia the devaluation went gradually but in Kazakhstan everything was done by one step creating enormous panic...

An interesting fact, that just a couple of weeks ago, Minister of Economy and Budget Planning Bakhyt Sultanov had promised that the tenge would be devalued by less than 10% in 2009.

Personally I had a déjà vu from the Soviet times when I saw the empty shelves in the grocery store. The grocery store didn't sell some products, they simply took away them. Another big supermarket, opened 24 hours was literally invaded and people bought everything to spend their tenges before the prices went up. The stores selling electronics and electrical goods suddenly closed for a " re-calculation".

It was said, by the Kazakh officials, that the devaluation was necessary to boost the national economy and "support the local producers" and that the prices for the local products won't go up. The biggest lie ever:

1. The goods produced in Kazakhstan are marginal, most of the goods are imported.

2. The goods produced in Kazakhstan are made from and depend on the imported commodities.

3. The prices have already gone up.

Most of the people who get their salaries and pensions in tenge are 25% poorer today. The biggest losers are ordinary people, as usual.

5 comments:

  1. You have some good points here. Many products are made in Kazakhstan that do not depend on imported goods and that are just as good as imported products. I mean come on, how good or bad can sunflower oil, mayonnaise, sour cream, or pasta really be? Kazakh made food is equal to imports and usually cheaper anyway. Sadly, many Kazakhstani perceive their own products as inferior and only buy imported goods.

    Also prices before the devaluation should be going down. In the US when oil prices fell, prices fell dramatically. Not so much in Kazakhstan. Not even the price of gas has fallen. I don't understand how it is possible that in Kazakhstan prices only go up, never down.

    Interesting blog. I'll definitely add it to my list of blogs to read and thanks for linking to me!

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  2. Thanks for your comments and adding me to your list! I like reading your blog.
    I've heard that local industries depend on imported equipment and packaging solutions. They need to maintain and change the equipment that will cost them more in the long run.That's what I've heard. I agree with you that the local products are underestimated, they at least as good and often even better ( organic) then imported ones. It's really amazing how prices always go up despite crisis.I don't think people here have ever experienced prices go down. It was funny when I went to baraholka last weekend and there were two different prices for the same product -- the "old" price and the "new" one. It was still possible buy for the "old" price, but just on this particular day -- "Tomorrow we will have only "new "prices". Take it or leave it.

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